Multiple Choice
On January 1, 2013, Nichols Company acquired 80% of Smith Company's common stock and 40% of its non-voting, cumulative preferred stock. The consideration transferred by Nichols was $1,200,000 for the common and $124,000 for the preferred. Any excess acquisition-date fair value over book value is considered goodwill. The capital structure of Smith immediately prior to the acquisition is: Compute the goodwill recognized in consolidation.
A) $800,000.
B) $310,000.
C) $124,000.
D) $0.
E) $(196,000.)
Correct Answer:

Verified
Correct Answer:
Verified
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